Single Point Communication

ARW Bulletin: “Sunrise or Sunset” is Now “SOS”

Air Wisconsin Pilots:

Four months ago your MEC launched the “2018: Sunrise or Sunset?” campaign to alert you to the challenges facing our airline and the fact that we have no new business on tap to extend the life of our carrier past February 2018. Our plan was to transition the campaign to a new, more urgent initiative called “SOS” in February 2017 if Air Wisconsin still lacked a plan with a positive

As you can see from the banner at the top of this email, our plans have changed. Like a wise flight crew expediting a departure out of an airport to avoid incoming thunderstorms, fast-moving changes to our segment of the industry have forced us to speed up our timeline. We are now officially in SOS mode at our carrier.

Why the change? Recent developments at other American Airlines feeder carriers lead us to question whether Air Wisconsin is part of American’s plan going forward.

American is investing heavily in its wholly-owned FFD partners PSA, Envoy, and Piedmont.

We are losing aircraft with no replacements for our fleet of aging 50-seaters that no one seems to want, as the mainline continues to assign new, state-of-the-art aircraft to their other partners.

In addition, based on their recent actions it appears our management is losing whatever interest they might once have had to stay competitive with their peers.

Grievances are growing as management seems to be treating our contract as voluntary rather than mandatory.

We are now beginning our seventh year of negotiations with no major advances in the key cornerstone areas of our contract: pay, scope, and benefits.

Management has stopped communicating with the employees and is relying on platitudes and hope rather than explaining what their plan is to keep us flying.

While AWAC appears to be standing still, other carriers are making great leaps forward thanks in part to support from AA.

One week ago on September 13, the PSA MEC announced it had reached an agreement with their company to dramatically increase compensation for their pilots. Just one day later, on September 14, the Envoy MEC announced a similar retention bonus program put forward by their company that increased new-hire pay rates by more than 46 percent.

Here’s how the new PSA and ENY deals stack up. The information for both these properties comes from pilot messages put out by the respective MECs.

PSA

Starting pay for new-hire First Officers and First Officers who have not yet completed their first year of service will significantly increase, from $24.62 per hour to PSA’s current 3rd-year blended pay rate of $38.50 per hour. Upon reaching their first anniversary, new-hire FOs will progress to the anticipated fourth-year blended rate-of-pay of $40.28 per hour. All First Officers currently in their second or third year with PSA will immediately move to the current fourth-year rate. PSAwill continue to offer all new-hire pilots a $15,000 sign-on bonus, with an additional $5,000 for new-hire pilots with a CRJ-type rating.

First Officers hired after May 1, 2016 and First Officers hired under the new Agreement will be eligible to receive a $20,000 retention bonus once they mark their one-year anniversary with the company. The bonus includes a payout of $2,500 per quarter beginning on the first quarter following their anniversary date and continuing over two years, or until a First Officer is upgraded to Captain.

All Captains at PSA at the time of signing the Letter of Agreement will receive a $7,500 retention bonus to be paid out in three $2,500 installments through December 2017. If a Captain flows to American before receiving all of the retention bonus, the unpaid portion will be paid when he or she joins American.

ENVOY

First-year pay at Envoy has been temporarily increased to $37.90 an hour, which was historically ENV’s third-year FO pay. Assuming 75 hours of pay a month plus the $15,000 to $20,000 bonus, a first-year pilot at Envoy Air will make between $49,000 and $54,000.

All other FOs on property will receive compensation increases in the form of step raises, outlined below.

Current Step and Pay Rate

New Step and Pay Rate

Increase %

1st year FOs – $25.84/hr hour

3rd year pay – $37.90/hr

46.6% raise

2nd year FOs – $34.91/hr

4th year pay – $39.78/hr

14% raise

3rd year FOs – $37.90/hr

5th year pay – $40.79/hr

7.6% raise

4th year FOs – $39.78/hr

5th year pay – $40.79/hr

2.5% raise

First Officers already on fifth year pay and above will receive an additional $2,500 bonus in addition to the $5,000 already guaranteed from a December 2014 TA, approximately a 6% raise at their current pay steps.

Envoy Captains will receive $7,500 incrementally throughout the next 16 months, roughly the equivalent of a 9% raise.

PDT

It is our understanding American’s third wholly-owned subsidiary, Piedmont, will follow with a similar compensation package as PSA and Envoy MEC’s have announced.

Meanwhile, ARW is near the bottom of the list when it comes to first-year pay and bonuses.

All of the carriers listed below are offering bonuses for both new hires and current pilots. We show Air Wisconsin for comparison purposes only.

One year ago when we were in the final stages of working on what ultimately became a failed tentative agreement, management’s mantra was that they couldn’t afford to pay us more because AWAC already led the industry in pilot compensation. They certainly cannot make that claim today. Under these new agreements at the wholly-owned AA carriers, new hires at Envoy and PSA will earn more than 4th-year ARW FOs the moment they step on the property. There is a hiring war going on for qualified pilots, and Air Wisconsin is standing still as carriers like Envoy, PSA and Endeavor unveil attractive new compensation packages and various paths for their pilots to move up to the mainline.

It is becoming increasingly clear that the best opportunity for survival as a fee-for-departure airline is to either be highly diversified with several mainline partners (like SkyWest and Republic) or be wholly-owned (like PSA and Envoy). As a single-partner FFD carrier with no flow agreement or career path program, we have neither or those advantages leaving our future in grave doubt. As ALPA has said, there is not a pilot shortage but rather a pilot PAY shortage. The company cannot stand pat with its current pay scale any longer and expect to be competitive. The game has changed and with neither a clear path going forward nor market-rate pay, AWAC will fall further behind until it responds to one or both of those challenges.

Meetings have been held today with members of the ARW SPC and national SPSC committees to begin planning a new strategy to assist our members in continuing to maximize their careers in these turbulent times. In future SOS messages your MEC will provide more detail on the industry environment and ARW’s position relative to our competitors.

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ARW Bulletin: “Sunrise or Sunset” is Now “SOS”

Air Wisconsin Pilots:

Four months ago your MEC launched the “2018: Sunrise or Sunset?” campaign to alert you to the challenges facing our airline and the fact that we have no new business on tap to extend the life of our carrier past February 2018. Our plan was to transition the campaign to a new, more urgent initiative called “SOS” in February 2017 if Air Wisconsin still lacked a plan with a positive

As you can see from the banner at the top of this email, our plans have changed. Like a wise flight crew expediting a departure out of an airport to avoid incoming thunderstorms, fast-moving changes to our segment of the industry have forced us to speed up our timeline. We are now officially in SOS mode at our carrier.

Why the change? Recent developments at other American Airlines feeder carriers lead us to question whether Air Wisconsin is part of American’s plan going forward.

American is investing heavily in its wholly-owned FFD partners PSA, Envoy, and Piedmont.

We are losing aircraft with no replacements for our fleet of aging 50-seaters that no one seems to want, as the mainline continues to assign new, state-of-the-art aircraft to their other partners.

In addition, based on their recent actions it appears our management is losing whatever interest they might once have had to stay competitive with their peers.

Grievances are growing as management seems to be treating our contract as voluntary rather than mandatory.

We are now beginning our seventh year of negotiations with no major advances in the key cornerstone areas of our contract: pay, scope, and benefits.

Management has stopped communicating with the employees and is relying on platitudes and hope rather than explaining what their plan is to keep us flying.

While AWAC appears to be standing still, other carriers are making great leaps forward thanks in part to support from AA.

One week ago on September 13, the PSA MEC announced it had reached an agreement with their company to dramatically increase compensation for their pilots. Just one day later, on September 14, the Envoy MEC announced a similar retention bonus program put forward by their company that increased new-hire pay rates by more than 46 percent.

Here’s how the new PSA and ENY deals stack up. The information for both these properties comes from pilot messages put out by the respective MECs.

PSA

Starting pay for new-hire First Officers and First Officers who have not yet completed their first year of service will significantly increase, from $24.62 per hour to PSA’s current 3rd-year blended pay rate of $38.50 per hour. Upon reaching their first anniversary, new-hire FOs will progress to the anticipated fourth-year blended rate-of-pay of $40.28 per hour. All First Officers currently in their second or third year with PSA will immediately move to the current fourth-year rate. PSAwill continue to offer all new-hire pilots a $15,000 sign-on bonus, with an additional $5,000 for new-hire pilots with a CRJ-type rating.

First Officers hired after May 1, 2016 and First Officers hired under the new Agreement will be eligible to receive a $20,000 retention bonus once they mark their one-year anniversary with the company. The bonus includes a payout of $2,500 per quarter beginning on the first quarter following their anniversary date and continuing over two years, or until a First Officer is upgraded to Captain.

All Captains at PSA at the time of signing the Letter of Agreement will receive a $7,500 retention bonus to be paid out in three $2,500 installments through December 2017. If a Captain flows to American before receiving all of the retention bonus, the unpaid portion will be paid when he or she joins American.

ENVOY

First-year pay at Envoy has been temporarily increased to $37.90 an hour, which was historically ENV’s third-year FO pay. Assuming 75 hours of pay a month plus the $15,000 to $20,000 bonus, a first-year pilot at Envoy Air will make between $49,000 and $54,000.

All other FOs on property will receive compensation increases in the form of step raises, outlined below.

Current Step and Pay Rate

New Step and Pay Rate

Increase %

1st year FOs – $25.84/hr hour

3rd year pay – $37.90/hr

46.6% raise

2nd year FOs – $34.91/hr

4th year pay – $39.78/hr

14% raise

3rd year FOs – $37.90/hr

5th year pay – $40.79/hr

7.6% raise

4th year FOs – $39.78/hr

5th year pay – $40.79/hr

2.5% raise

First Officers already on fifth year pay and above will receive an additional $2,500 bonus in addition to the $5,000 already guaranteed from a December 2014 TA, approximately a 6% raise at their current pay steps.

Envoy Captains will receive $7,500 incrementally throughout the next 16 months, roughly the equivalent of a 9% raise.

PDT

It is our understanding American’s third wholly-owned subsidiary, Piedmont, will follow with a similar compensation package as PSA and Envoy MEC’s have announced.

Meanwhile, ARW is near the bottom of the list when it comes to first-year pay and bonuses.

All of the carriers listed below are offering bonuses for both new hires and current pilots. We show Air Wisconsin for comparison purposes only.

One year ago when we were in the final stages of working on what ultimately became a failed tentative agreement, management’s mantra was that they couldn’t afford to pay us more because AWAC already led the industry in pilot compensation. They certainly cannot make that claim today. Under these new agreements at the wholly-owned AA carriers, new hires at Envoy and PSA will earn more than 4th-year ARW FOs the moment they step on the property. There is a hiring war going on for qualified pilots, and Air Wisconsin is standing still as carriers like Envoy, PSA and Endeavor unveil attractive new compensation packages and various paths for their pilots to move up to the mainline.

It is becoming increasingly clear that the best opportunity for survival as a fee-for-departure airline is to either be highly diversified with several mainline partners (like SkyWest and Republic) or be wholly-owned (like PSA and Envoy). As a single-partner FFD carrier with no flow agreement or career path program, we have neither or those advantages leaving our future in grave doubt. As ALPA has said, there is not a pilot shortage but rather a pilot PAY shortage. The company cannot stand pat with its current pay scale any longer and expect to be competitive. The game has changed and with neither a clear path going forward nor market-rate pay, AWAC will fall further behind until it responds to one or both of those challenges.

Meetings have been held today with members of the ARW SPC and national SPSC committees to begin planning a new strategy to assist our members in continuing to maximize their careers in these turbulent times. In future SOS messages your MEC will provide more detail on the industry environment and ARW’s position relative to our competitors.